Fresh calls for OTC energy market regulation

The coalition represents a fresh regulatory threat to the OTC energy derivatives market. Earlier this month the US Senate blocked a measure to re-regulate the trading of OTC energy derivatives. Feinstein had proposed a bill amendment that would permit the Commodity Futures Trading Commission to regulate OTC trading in energy and metals derivatives, in the wake of Enron’s collapse. But her proposals were defeated on a routine procedural vote.

“Enron may be gone, but its clones continue to amass market power that enables them to set the price of natural gas and electricity without any checks and balances whatsoever,” said a coalition spokesperson.

The International Swaps and Derivatives Association last week said it is preparing itself for further regulatory threats to the OTC energy market. “The proponents of new regulation still have not demonstrated a market failure [and] there is no convincing evidence that sufficient regulatory authority is not already in place,” said an Isda report condemning calls for OTC energy regulation.